Question

Jennifer invested $379 in a simple interest account. The account now has $554 in it. The money has been invested for 5 years. What interest rate (as a percentage) did this account have?

Answer 1

9514 1404 393

Answer:

9.23%

Explanation:

The account balance for simple interest is given by ...

A = P(1 +rt) . . . . . principal P invested for t years at rate r

554 = 379(1 +r·5)

554 = 379 + 1895r . . . . eliminate parentheses

175 = 1895r . . . . . . . . . subtract 379

r = 175/1895 ≈ 0.092348 ≈ 9.23%

Jennifer's account had an interest rate of about 9.23%.